Balance of power is something we usually talk about as it relates to international positioning between powerful nations. Now the phrase is lending itself to the real estate market and the buyers are finally getting the upper hand.
Homebuyers are benefiting from the fading disappearance of bidding wars. Sellers are willing to lower prices and offer incentives. Increased home listings are working to the advantage of buyers with less competition and more negotiating room. And most important of all, sellers are becoming more flexible, accepting offers below the asking price especially for properties that need repairs – like on Anna Maria Island – or properties that are in less desirable areas.
However, all real estate markets are not equal. The National Association of Realtors indicates that homeowners with ultra-low mortgage rates have been reluctant to sell, but that is starting to loosen up as more people decide they can’t keep putting off a move and wait for rates to take a nosedive. The rates are starting to trend under 7% but not enough yet to move the needle and change the real estate market.
Housing inventories are also rising in certain states where properties look overvalued, so buyers are backing off. Because of the migration to the Sunbelt states during the pandemic, property prices in some southern states rose faster than in other parts of the country. In Florida, for instance, the value of the median home increased 64% over the past five years according to Redfin, compared with 42% in Illinois and 17% in New York. As we know, many of our out-of-state residents come from Illinois and New York.
The huge increase in value that Florida has enjoyed is slowing down as migration to Florida has slowed. The state is importing fewer new high wage earners to support the home prices and the insurance costs, putting affordability of home ownership out of balance for many buyers. Nevertheless, Florida is still a popular state and very tax friendly compared to northern states, with insurance costs starting to trend downward.
February sales statistics for Manatee County are out, published by the Realtor Association of Sarasota and Manatee:
Single-family homes closed 22.1% more properties since February of last year. The median sale price was $480,000, down 8.6%, and the average sale price was $662,504, down 10%. Median time to contract was 49 days compared to 35 days last year, and the month’s supply of available properties was 4.6 months compared to 3.9 months last year.
Condos closed 7% fewer properties this February compared to last. The median price was $335,990, down 6.1% and the average was $408,238 down 7.5%. Median days to contract was 60 days compared to 47 days last year and the month’s supply of available properties was 8 months compared to 5.6 last year.
The wrap-up on these numbers indicate that sellers are no longer in a competitive market and need to adjust their expectations. Median sale prices are down, it’s taking longer to sell and new listings are going up across all categories.
Homebuyers have the most leverage over sellers in years. In our region, last year’s storms have increased that leverage. Eventually the market will catch up to the number of properties available, so pay attention buyers, this is your window.
